How to Avoid the Pitfalls of Financial Aid Awards and Get the Best Deal for Your Family

Financial aid awards are meant to help families afford college, but the truth is that award letters can be confusing and misleading. Learning tips for evaluating your financial aid award letter and negotiating a better deal with the college's financial aid office can make a big impact on how much aid your child receives.

In today's world, higher education has become increasingly expensive, making it challenging for many families to pay for their children's college education. Financial aid awards are meant to help families afford college, but the truth is that award letters can be confusing and misleading.

As a result, families often end up making poor financial decisions that result in significant student loan debt after graduation. This is why it is essential to work with a Certified College Funding Specialist (CCFS®) who can help you understand the fine print and make informed financial decisions.

In this article, we will discuss the strategic deceptions colleges use when issuing financial aid award letters, and how a CCFS® can help you avoid them. We will also provide tips for evaluating your financial aid award letter and negotiating a better deal with the college's financial aid office.

Total Cost of College

One of the most significant deceptions used by colleges is only listing the basic costs, such as tuition, room and board, and books and supplies, in the financial aid award letter. The full cost of attending a college can be much higher when fees, travel expenses, and personal expenses are added.

To get the actual cost of attending a college, you can call the college's Financial Aid Office and ask for the total amount of Stafford and PLUS loans that you can borrow for the entire year of college. This will give you the true cost of attending that college.

Missing Expected Family Contribution (EFC)

Another deception used by colleges is not listing the expected family contribution (EFC) on the financial aid award letter. The EFC is the dollar amount that the family is expected to contribute before any financial award is given by the college. The EFC can vary depending on the college's additional questions in Section Q of the CSS PROFILE.

To determine your EFC, you can call the college's financial aid office and ask for your EFC number. This will allow you to compare the financial aid awards from different colleges and determine which college is meeting 100% of your family's financial needs.

One-Year Awards

Colleges often award students grants or scholarships in the first year, only to remove them in subsequent years. To avoid this, you must ask the financial aid administrator of each school what is required to renew each grant and scholarship in subsequent years.

PLUS Loan Maneuvering

Some financial aid awards may add loans together with grants and scholarships or not even use the word "loan" to describe the award given. Parents may see the big Parent PLUS loan at the bottom of the award letter, which equals the entire cost of attendance on the award letter.

It is essential to understand that a college loan for 11.268% is not a good deal. A CCFS® can help you evaluate your financial aid award letters and negotiate a better deal with the college's financial aid office.

Understanding the Fine Print

In conclusion, financial aid award letters can be misleading, and families must be cautious when making decisions about college enrollment. A CCFS® can help you understand the fine print and make informed financial decisions that will save you considerable money on your college expenses. Schedule a call today with our Certified College Funding Specialist.

By following the tips outlined in this article, you can avoid the strategic deceptions used by colleges and negotiate a better deal with the financial aid office. Don't let financial aid award letters confuse you; contact a CCFS® today and make informed financial decisions that will benefit you in the long run.

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by GW Financial, Inc. to provide information on a topic that may be of interest. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2024 GW Financial, Inc.